BP has found a way to get around US sanctions against Iran

Iran is now officially pre-qualifying E&Ps for an offering
round of oil and gas projects. Putting fields up for bids to
foreign operators for the first time in years.

But there’s a problem in pursuing this rich opportunity — at
least for one big group of people in the petroleum business.

Americans.

While most of the world has lifted business sanctions on Iran,
the U.S. is still holding onto some significant restrictions. The
major one being so-called “secondary sanctions”, which prohibit
U.S. citizens from doing business on Iranian projects.

Effectively, that means Iran’s oil and gas is still a no-go for
anyone with a U.S. passport. Which is a big problem for one of
the world’s largest oil companies, BP — with the British major
having an American CEO, Bob Dudley.

Remove CEO Dudley from the process.

BP’s board said it has created a special executive committee
that will explore Iranian business opportunities. With CEO
Dudley being excluded from this Iran working group — which
will instead be run by Chief Financial Officer Brian Gilvary,
who is a British national.

The committee also includes members from Ireland and India,
as well as another British citizen.

Such “ringfencing” of the company’s top executive shows just
how motivated big firms like BP are to get into the Iran oil
sector. Especially given that any projects here will have to
carefully monitored to ensure that no other U.S. employees —
or U.S. subsidiaries, contractors, bank accounts, etc. —
become involved with local projects.

For its part, the American government has assured
international firms they will not be penalized in the U.S.
for doing business with Iran. This case could represent a
critical test for the oil industry — watch to see if BP
pursues bidding on specific Iranian fields, and what the
reaction will be from Washington. And then to see if this
“compartmentalization” strategy gets used by more
international oil and gas players.

Incredibly though, BP said this past week it’s not going to
miss opportunities in Iran just because of its CEO. With the
board of directors outlininga unique strategythat will allow it to get
around sanctions and pursue new projects in the country.

Remove CEO Dudley from the process.

BP’s board said it has created a special executive committee
that will explore Iranian business opportunities. With CEO
Dudley being excluded from this Iran working group — which
will instead be run by Chief Financial Officer Brian Gilvary,
who is a British national.

The committee also includes members from Ireland and India,
as well as another British citizen.

Such “ringfencing” of the company’s top executive shows just
how motivated big firms like BP are to get into the Iran oil
sector. Especially given that any projects here will have to
carefully monitored to ensure that no other U.S. employees —
or U.S. subsidiaries, contractors, bank accounts, etc. —
become involved with local projects.

For its part, the American government has assured
international firms they will not be penalized in the U.S.
for doing business with Iran. This case could represent a
critical test for the oil industry — watch to see if BP
pursues bidding on specific Iranian fields, and what the
reaction will be from Washington. And then to see if this
“compartmentalization” strategy gets used by more
international oil and gas players.